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Archive for Tuesday, December 18, 2001

Tobacco, alcohol lobbyists preparing for another round of debates with lawmakers

December 18, 2001

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It's been 16 years since Kansas lawmakers last raised cigarette taxes.

It was 1983 when the state tax on alcoholic beverages was last hiked.

Lobbyists for cigarettes and alcohol once again thwarted efforts to raise taxes on their products in the last legislative session.

But with the state falling deeper in the budget hole every day, they know they must redouble their efforts in the session that starts next month.

"We're aware of the potential that is out there for an increase in cigarette taxes in Kansas," said John Singleton, director of public affairs for R.J. Reynolds Tobacco Co. in Winston-Salem, N.C.

"It's going to be a rerun of the debate (from last session)," said R.E. "Tuck" Duncan, executive secretary of the Kansas Wine and Spirits Wholesalers Assn.

Gov. Bill Graves has said the state faces a $426 million budget deficit that without new taxes will require cuts in spending on public schools, universities, social services, highways and public safety.

In a letter Monday to lawmakers, Graves' budget director Duane Goossen said the governor will propose a tax increase by the time the session starts Jan. 14.

"We are looking at a variety of options," to raise new revenue, Goossen said. Like Graves, he declined to say what taxes were being considered.

In light of the dire budget predictions, some lawmakers, such as Rep. Ralph Tanner, R-Baldwin, who say they oppose a general tax increase, have indicated willingness to consider increases in so-called sin taxes.

State gallonage taxes on beer, wine and alcohol have not increased since 1977; the last tax change for alcoholic beverages was in 1983 when an enforcement tax of 8 percent on alcohol sales was established. The state's 24-cent per pack tax on cigarettes is 16 years old.

Last session, some lawmakers unsuccessfully sought to increase funding for public schools through an increase in taxes on alcoholic beverages and tobacco products.

The tobacco and alcohol lobbies went to work, telling lawmakers the tax proposals would unfairly hit low and middle class Kansans and hurt small businesses, such as bars, restaurants and liquor stores.

Duncan, with the wine and spirits group, said the industry will argue that the budget problem is just too big to fix by targeting one or two industries.

"Anything other than a broad-based tax probably won't solve it," he said.

Singleton agreed. "We favor a look at a broader tax," he said.

Taxes on beer, wine, alcohol, cigarettes and tobacco products bring in about $105 million per year.

Sen. David Corbin, R-Towanda, and chairman of the Senate tax committee, said cigarette and alcohol taxes would be "likely candidates."

Corbin joked that lobbyists should have accepted a tax increase last session in order to defend themselves against a larger tax increase this coming session.

Corbin said that at this point he doesn't support any tax increase.

And, he noted, that the same lawmakers who rejected tax increases last year are back this year. "No personnel have changed. Nothing has changed except the demand for money," Corbin said.

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